elaws - employment laws assistance for workers and small businesses

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Small Business Retirement Savings Advisor

The information contained in this table is based on current interpretation of
the law. Where IRS guidance is pending, assumptions have been made. Seek tax advice for
additional rules and complete information.

Please return to the Main Menu for more information on small business retirement savings.

Features
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Options

Payroll Deduction IRA

SEP-IRA

SIMPLE-IRA

Safe Harbor 401(k)

Automatic

Enrollment

Enrollment

401(k)

401(k)

Profit Sharing

Defined Benefit

Key Advantage

Easy to set up and maintain.

Easy to set up and maintain.

Salary reduction plan with
little administrative paperwork.

Permits employee to contribute more than in other options without annual discrimination testing.

Provides high level of participation and permits high level of salary deferrals by employees. Also safe harbor relief for default investments.

Permits employee to contribute more than in other options.

Permits employer to make large contributions for employees.

Provides a fixed, pre-established benefit for employees.

Employers Who Can Provide This Option

Any business with one or more employees.

Any business that does not currently maintain any other retirement plan.

Any business with 100 or fewer employees that does not currently maintain any other retirement plan.

Any business with one or more employees.

Any business with one or more employees.

Any business with one or more employees.

Any business with one or more employees.

Any business with one or more employees.

Employer's Responsibilities

Employer's Respon- sibilities

Set up arrangements for employees to make payroll deduction contributions.
Transmit contributions for employees to funding vehicle.
No employer tax filing required.

There is no model form to establish a plan. Advice from a
financial institution or employee benefit advisor may be necessary.
Annual filing of IRS Form 5500
required. Also requires annual non-discrimination testing to ensure plan
does not discriminate in favor of highly compensated employees.

There is no model form to establish a plan. Advice from a financial institution
or employee benefit advisor would be necessary.
Annual filing of IRS Form 5500 is required.

There is no model form to establish a plan. Advice from a financial institution or employee
benefit advisor would be necessary.

Annual filing of IRS Form 5500 is required.
Actuary must determine funding obligations.

Employee: Up to $12,500 in 2018. Additional contributions can be made by participants age 50 or over up to $3,000 in 2018. Employer: Either match employee contributions $ for $ up to 3% of compensation (can be reduced to as low as 1% in any 2 out of 5 yrs.) or contribute 2% of each eligible employee's compensation, up to $5,500 2.

Employee: Up to $18,500 in 2018. Additional contributions can be made by participants age 50 or over up to $6,000 in 2018. Employer / Employee Combined: Contributions per participant up to the lesser of 100% of compensation1 or $55,000 in 2018. Employer can deduct amounts that do not exceed 25% of aggregate compensation for all participants.

Employee: Up to $18,500 in 2018. Additional contributions can be made by participants age 50 or over up to $6,000 in 2018. Employer / Employee Combined: Contributions per participant up to the lesser of 100% of compensation1 or $55,000 in 2018. Employer can deduct amounts that do not exceed 25% of aggregate compensation for all participants.

Employee: Up to $18,500 in 2018. Additional contributions can be made by participants age 50 or over up to $6,000 in 2018. Employer / Employee Combined: Contributions per participant up to the lesser of 100% of compensation1 or $55,000 in 2018. Employer can deduct amounts that do not exceed 25% of aggregate compensation for all participants.

Contributions per participant up to the lesser of 100% of compensation1 or $55,000 in 2018. Employer can deduct amounts that do not exceed 25% of aggregate compensation for all participants.

Per plan terms, employer may permit or require employee contribution.

Minimum Employee Coverage

Requirements

Require- ments

Should be made available to all employees.

Must be offered to all employees who are at least 21 years of age, employed by the business for 3 of last 5 years and earned at least $600 in a year for 2018.

Must be offered to all employees who have earned at least $5,000 in
previous 2 years, and are reasonably expected to earn at least $5,000 in
the current year.

Generally, must be offered to all employees at least 21 years of age who
worked at least 1,000 hours in previous year.

Generally, must include all employees who have not already opted out and
those who are at least 21 years of age who worked at least 1,000 hours
in previous year.

Generally, must be offered to all employees at least 21 years of age who
worked at least 1,000 hours in previous year.

Generally, must be offered to all employees at least 21 years of age who
worked at least 1,000 hours in previous year.

Must
be offered to all employees at least 21 years of age who worked at least 1,000 hours in
previous year.

Withdrawals,

Withdraw- als,

Loans and Payments

Withdrawals at anytime ; subject to current federal income taxes
and a possible 10% penalty if the participant is under age 59 1/2.

Withdrawals at anytime; subject to current federal income taxes
and a possible 10% penalty if the participant is under age 59 1/2.

Withdrawals at any time subject to current federal income taxes.
If employee is under age 59 1/2, may be subject to a 25% penalty if
taken within the first 2 years of participation and a possible 10%
penalty if taken afterwards.

Cannot take withdrawals until a specified event, such as reaching
59 1/2, death, separation from service or other event as identified in
plan. May permit loans and hardship withdrawals. Withdrawals may be
subject to a possible 10% penalty if participant is under age 59 1/2.

Cannot take withdrawals until a specified event, such as reaching
59 1/2, death, separation from service or other event as identified in
plan. May permit loans and hardship withdrawals. Withdrawals may be
subject to a possible 10% penalty if participant is under age 59 1/2.

Cannot take withdrawals until a specified event, such as reaching
59 1/2, death, separation from service or other event as identified in
plan. May permit loans and hardship withdrawals. Withdrawals may be
subject to a possible 10% penalty if participant is under age 59 1/2.

May permit loans and hardship withdrawals. Hardship withdrawals
may be subject to a possible 10% penalty if participant is under age 59
1/2.
Payment of benefits generally at retirement.

Payment
of benefits generally at retirement, may offer participant loans.